The ruling and opposition parties agreed Wednesday to extend the real estate acquisition tax reduction by six months to prevent the property market from slowing down further.

The National Assembly’s Public Administration and Security Committee approved the bill readjusted from the ruling party’s original proposal which called for a one-year extension.

“The parties agreed to extend the acquisition tax reduction period by six months as a short-term measure to stimulate the real estate market,” said Rep. Hwang Young-cheul, the Saenuri Party’s representative in the Public Administration and Security Committee.

The measure, implemented through revision of the Restriction of Special Local Taxation Act, will be retroactively applied to transactions that have taken place since Jan. 1.

Under the temporary measure, the tax rate on residential properties under 900 million won ($826,000) is halved to 1 percent, while that on properties between 900 million and 1.2 billion won is lowered to 2 percent from 4 percent. Properties exceeding 1.2 billion won will continue to be taxed at 3 percent instead of the usual 4 percent.

Although Saenuri Party policy committee chief Rep. Chin Young had initially proposed extending the cut by one year, the parties are reported to have shortened the term due to concerns that it will damage provincial governments’ finances.

By Choi He-suk  (cheesuk@heraldcorp.com)